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What just happened? Google reportedly paid Samsung billions of dollars to make its apps and services the default options on smartphones made by the South Korean company. The information comes a few short weeks after a top Google executive admitted that the company paid $26.3 billion to a number of companies in 2021 to be the default search engine on various mobile phones and web browsers.
The disclosure came during the ongoing Google vs Epic Games trial, where Google Vice President for Partnerships, James Kolotouros, revealed that the company signed agreements with a host of smartphone manufacturers, including Samsung, to have the Google Play Store preinstalled on their smartphones and tablets. Kolotouros also revealed that around half of Google’s Play Store revenues come from Samsung smartphone users.
According to Bloomberg, the payment was part of Google’s plans to split revenue from the Play Store with its hardware partners for having its apps and services preinstalled on their smartphones. Apart from the Play Store, some of the other Google apps that come preinstalled on Samsung smartphones include Google Assistant, Google Search, Google Maps, Google Chrome, and more.
Back in 2019, Google reportedly planned to spend up to $200 million to persuade Samsung to distribute its Galaxy Store app via the Play Store as part of its ‘Project Banyan’ initiative. However, the deal never went through, and Samsung continues to install the Galaxy Store independently on every Galaxy device it sells. Still, the Play Store remains the preeminent way to download apps and games on Android devices, and Google’s decision to pay Samsung $8 billion over a period of four years may have a lot to do with it.
The Google vs Epic case has revealed many interesting pieces of information about Google’s business practices and how it manages to retain its default status on most of the popular desktop and mobile platforms. That includes an admission from Alphabet CEO Sundar Pichai that the company pays Apple 36 percent of its search revenues from the latter’s Safari web browser in exchange for being the default search engine on all of Apple’s devices.
According to an estimate by asset management and brokerage firm Bernstein, Google could be paying Apple $19 billion this year alone to remain the default search engine on Safari across iPhone, iPad, and Mac. While its critics argue that the payments amount to a systematic violation of US antitrust regulations, Google claims it does not prevent anyone from changing the default search option on any device or app, and users can easily set their own preferred search provider with a few clicks.
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